First-time home buyers might have concerns about buying one of the biggest purchases they will ever make in their lives. Some reasons they might be apprehensive could include issues such as having low credit scores to thinking they cannot afford it because of their incomes.
However, there is an option out there for those that may have problems borrowing through conventional methods; the alternate choice for them could be an FHA loan.
What Is an FHA Loan?
A Federal Housing Administration (FHA) loan is a government mortgage agency that offers approved lenders insurance. The Great Depression was a catalyst for Congress creating the FHA. Banks folding impeded thousands from being able to own homes, so in 1934 they organized this department to help stimulate the economy through jobs and to aid folks who were not able to afford too much at that time.
Today, the department is still providing a way for people to become homeowners through private lenders, such as banks, credit unions and other institutions. These granters are more apt to offer loans when they have a safeguard with the FHA paying their claim is the borrower defaults on the loan.
Finding FHA Mortgage Lenders
You might be curious about how you can contact a business about this specific type of loan. Well, here are four that offer FHA mortgages.
Mortgage Investment Group (MIG)
If you have a stable income, for instance, you have been at your job for at least 2 years, have a credit score of 600 and can pay 3.5 percent of the total cost of the residence you are interested in, then MIG is the mortgage lender for you. You be expected to pay for the insurance, taxes upfront with less than 31 percent of your total income.
After this, you will continue to make your monthly payments. In addition, MIG gives you the opportunity to get assistance from approved relatives or other sources for financial help in the form of gifting for your down payment. This term means it is truly a gift and you are not expected to pay it back.
New American Funding
If your FICO score is 580 and your credit is sub-par, this company is willing to work with you. They offer you the ability to place a small down payment using money gifted to you, as well as grants in your quest for a home.
They offer a variety of rates to fit within your budget, from a 15-year fixed one that has all the advantages of a 30-year rate loan, to an FHA Streamline Refinance Loans that can help individuals get money for home improvements without going through the frustration of another appraisal or proof of income.
Navy Federal Credit Union
If you are looking for a loan and you are or were part of one of the military branches, you need to look at this lender. As they are a credit union, it means they are owned by their members and not profit-oriented as with banks.
This lending institution is great for individuals who are attempting to purchase a house for the first time but has less than stellar credit. Members have to pay at least 3.5 percent of the down payment for the complete cost of the residence; however, the seller can help with up to 6 percent of the closing cost of the loan.
Quicken Loans
This company boasts of their specialty in working with FHA loans every day. They pride themselves on providing different modes of communication, such as chat and email, so people can get prompt help with their inquiries.
Your Own Abode
FHA Mortgage Lenders are part of the solution to home ownership for many potential buyers.